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ARKEMA
ROADSHOW PRESENTATION
SEPTEMBER 2020
ARKEMA IN A SNAPSHOT
ARKEMA AT A GLANCE
3
31%
21% 24%
24%
Adhesive Solutions
Advanced Materials
Coating Solutions
Intermediates
Businesses
Present
in 55 countries144 plants
operated
2.8% of revenues
invested in R&D
20,500employees
€8.7b
sales
2019 SALES SPLIT
Paints & Coatings
Building & Construction
Automotive & TransportationConsumer goods
General industry
Electrics, electronics & energy Nutrition & water
22%
7%
7%
7%
End markets15%
22%
20% 32%
28%36%
Regions
4%
Asia
North-America
Europe
ROW
ROADSHOW - SEPTEMBER 2020
A HIGH-LEVEL FINANCIAL PERFORMANCE
4
Sales (€b)
8.8
7.58.3
2016 2017 2018 2019
8.71,474
1,189
1,391
2016 2017 2018 2019
1,457
EBITDA (€m)
and EBITDA margin (%)
15.8%
16.7% 16.7% 16.7%
ROADSHOW - SEPTEMBER 2020
RECORD CASH FLOW GENERATION IN 2019
5
EBITDA to cash conversion rate
52%above the target of 35%
Working capital (% of annual sales)
13.8%close to the very good level of 2018
Recurring and exceptional capital expenditure
€607 macceleration of major organic growth projects
Tax rate (as a % of REBIT)
19%stable relative to 2018
499
565
667
Free cash flow (€m)
2017 2018 2019
ROADSHOW - SEPTEMBER 2020
A VERY SOLID BALANCE SHEET
6
2021 2022 2023 2024 2025 2026 2027 2028 20292020
RCF
3004.75%
900
1503.125%
400
2.75% 300
1.50%
700
1.50%
900
1.50%
500
0.75%
Senior bond
Hybrid bond
* €300m new hybrid bond in January 2020 with a first call option exercisable after 6 years giving Arkema the possibility to refinance the 2020 hybrid of €300m should the reimbursement option be exercised
ROADSHOW - SEPTEMBER 2020
Gearing(net debt excluding hybrids dividedby shareholders’ equity)
31%
Hybrid bonds(booked as shareholders’ equity)
€1,000 m*
Net debt (excl. hybrids) / EBITDA
1.1x
STRONG CSR REQUIREMENTS
7
2015 2019
BB A
C B
42 65
• Rank among the
best perfoming
companies
• Inclusion in the DJSIn.a.1 4e/38Global chemist
Top 1%
NON-FINANCIAL RATINGS
1. Not disclosed
EUROPE 120 INDICESEUROZONE 120 INDICES
OUR AMBITION
ROADSHOW - SEPTEMBER 2020
40
60
80
100
01/01/2019 01/04/2019 01/07/2019 01/10/2019 01/01/2020 01/04/2020 01/07/2020
EVOLUTION OF THE SHARE PRICE SINCE 1st JANUARY 2019
8
* The panel of chemicals peers includes Ashland, BASF, Celanese, Clariant, Dupont, Eastman, Evonik, HB Fuller, Lanxess, Solvay
ROADSHOW - SEPTEMBER 2020
x1.7
around
x4more than
(with reintegrated dividends)
TSR since May 2006
Arkema
CAC 40
Arkema : -1.7%
Average of peers* : -11.8%
x2.5around
Average of peers*
2019 2020
74.96
60
40
80
Arkema : + 26.3%
CAC 40 : + 26.4%
Average of peers* : + 18.1%
31 December31 March 30 June 30 September 31 March 30 June
CAC 40 : -16.3%
OUR LONG TERM AMBITION
OUR VISION
10
Be the Specialty Materials leader offering
the most innovative and sustainable solutions to
address our customers’ current and future challenges
ROADSHOW - SEPTEMBER 2020
ARKEMA HAS UNIQUE MATERIALS CAPABILITIES TO ADDRESS THESE CHALLENGES
11 ROADSHOW - SEPTEMBER 2020
Bonding materials
Bio-based resources
Protectingsurfaces
Surfacescience
Structuring materials
Additivetechnology
Recyclable materials
Nanoscience
Piezoelectricmaterials
UV curing technology
Composite materials
Rheologymodifications
Change picture
(wind turbine
blade)
THIS KNOW-HOW IS ORGANIZED INTO 3 SYNERGISTIC GROWTH PLATFORMS
12 ROADSHOW - SEPTEMBER 2020
Specialty Materials
Coating
solutions
Advanced
materials
Adhesive
solutions
General industry Consumer goods Electric & energyAutomotive &
transportationNutrition & water
Building &
constructionPaint & coatings
Key end markets
THESE 3 PLATFORMS ARE DEVELOPED SINCE 2005 THROUGH
A PROFOUND PORTFOLIO SHIFT
13
1. Sales acquired / divested over 2005-2019 (full year impact) 2. Finalized on 1 June 2020 3. Initial plan was ~€300m EV for € 700m sales but achieved ~€650m EV for €550m sales
Hipro/Casda
Seppic specialty surfactants
Geo polymer crosslinkers
Select Dow acrylic assets Coatex
Cray Valley / Sartomer
Den Braven
Oxido polymer crosslinkers
Specialty Amines
Urea formal-dehyde resins
Vinylcompounding
in Italy
Higher Methacrylates
CerexagriMineral
Flocculants
Sanitary heating
PipesAluminium chloride
PC sheet Tin stabilizer
Sunclear
Activated carbon and
Filter aids
Pipe business in
FranceVinyl
ProductsCoating resinsin South Africa
50% stake inOxochimie
FunctionalPolyolefins business 2
€4.4b Acquisitions1
€2.2b Divestments1
Sunke
Bostik
XLBrands
ArrMaz
Prochimir
Lambson
LIP
3
7.6xAverage EV/EBITDA
multiple aftersynergies and growth
(vs. 9.4x at acquisition)
8.6xAverage EV/EBITDA
multiple of assets sold(excluding vinyls)
Colored boxes represent the largest acquisitions and divestments over the period
ROADSHOW - SEPTEMBER 2020
Fixatti
WE HAVE ALIGNED OUR BUSINESS STRUCTURE WITH OUR VISION
14
1. Excluding corporate, corresponding to ~1% of sales
Specialty Materials
2.1Sales, €b
2.72.1
1.8
12.9%EBITDA margin1 21.7% 14.4%
7.8%ROCE113.3% 13.8%
21.0%
26.5%
Separate reporting of Adhesives (Bostik)
Now including Thiochemicalsand Hydrogen peroxide
Now including UV cure resins (Sartomer) but excluding
Asia Acrylics
Construction & Consumer
IndustrialAssembly
High-Performance
Polymers
PerformanceAdditives
Coating Resins
CoatingAdditives
PMMAFluorogasesAsia Acrylics
2019 FINANCIALS
Adhesive Solutions Advanced Materials Coating Solutions Intermediates
Now including Asia Acrylics which does not benefit yet
from integration
15.8% net of corporate 20% net of corporate
ROADSHOW - SEPTEMBER 2020
15
OUR VISION IS TO BECOME A PURE SPECIALTY MATERIALS PLAYER
Develop differentiatedstrategies across businesses
€10-11b sales
GDP+ organic growth
High group profitability
of ~17% EBITDA margin
Strong cashflow generation
Superior resilience
OUR 2024 AMBITION
>
SPECIALTY MATERIALS INTERMEDIATES
3-3.5% p.a. average annual organic revenue growth
M&A to more than double organic growth
Increase EBITDA margin from
15.8% to ~17%1
>40% cash generation2
1. Net of corporate costs, corresponding to ~1% of sales 2. Free cash flow excluding exceptional CAPEX divided by EBITDA
ROADSHOW - SEPTEMBER 2020
16
EACH PLATFORM HAS SET GROWTH AND PROFITABILITY AMBITIONS
1. Excluding corporate, corresponding to ~1% of sales
Sales split 2024 (incl. M&A)
30-35%35-40%
25-30%
Average annual organic revenue growth
~3% ~4% ~3%
EBITDA margin1 2024 ~16%~22%~16%
Adhesive SolutionsBe a consolidator of the market, focused on high performance
bonding and construction solutions
Advanced MaterialsInvest and innovate to support exponential needs for materials
based on megatrends
Coating SolutionsContinue to enhancethe value proposition
and sustainable offering
While keeping strict financial discipline at group level: including a ROCE > 10% and normative CAPEX ~5.5% of sales
ROADSHOW - SEPTEMBER 2020
17
ADHESIVE SOLUTIONS STRATEGY AT A GLANCE
+300 bpsEBITDA margin increase
High single-digit Annual sales growth
incl. M&A2
46%
24%
30%Europe
Asia & Rest of the World
North America
42%
10%
48%
Building & Construction
Do-it-yourself3
Industry3
2019 KEY FINANCIALS 2019 REVENUE SPLIT 2024 AMBITION
12.9% EBITDA margin
€2.1bsales
3% CAPEX intensity1
2.7% R&D intensity1
1. As % of sales 2. Organic growth of ~3% 3. Separate market definitions as used by Adhesive solutions
Grow through bolt-on M&A in a fragmented
market
Accelerate organic growth through presence in Asia as well as key technologies (high-performance adhesives for industrial
assembly and waterproofing & flooring in construction)
Launch phase 2of our operational
excellence program
Growth levers
ROADSHOW - SEPTEMBER 2020
18
ADVANCED MATERIALS STRATEGY AT A GLANCE
30%
28%
42%
Electrics, electronics & energy
Building & Construction
Consumer goods
General industry
Automotive & Transportation
Paint & coatings
Nutrition & Water
35%
18%14%
11%
10%
8%4%
2019 REVENUE SPLIT 2024 AMBITION
Stable at 22%EBITDA margin
4%Annual organic sales growth
Europe
Asia & Rest of the World
North America
21.7% EBITDA margin
€2.7bsales
7-8% CAPEX intensity1
2019 KEY FINANCIALS
3.4% R&D intensity1
Be the preferred partner
to solve our customers
materials challenges
Support growth with high-return
expansion projects (polyamides in
Asia, PVDF globally, PEKK in US,…)
Innovate with a focus on sustainability
(bio-sourced materials, new energy,
lightweight,…)
Growth levers
1. As % of sales
ROADSHOW - SEPTEMBER 2020
19
COATING SOLUTIONS STRATEGY AT A GLANCE
41%
47%
12%
Consumer goods
60%14%
8%
8%8%
Paint & coatings
Nutrition & Water
General industry
14.4% EBITDA margin
€2.1bsales
5-6% CAPEX intensity1
2019 KEY FINANCIALS 2019 REVENUE SPLIT 2024 AMBITION
+150bpsEBITDA margin increase
3%Annual organic sales growth
Europe
Asia & Rest of the World
North America
2.3% R&D intensity1
Building & Construction
Electrics, electronics & energy
Growth levers
Further strengthen our Sustainable technology offering (Low-VOC formulations, bio-sourced,
energy efficient products)
Increase capacity in our existing platforms in fast growing geographies (e.g. photocurable
resins in China, powder coatings India,…)
Optimize operating model incl. closer integration with other
platforms and downstream acrylics
1. As % of sales
ROADSHOW - SEPTEMBER 2020
20
INVESTIGATING DIFFERENTIATED STRATEGY ACROSS INTERMEDIATES BUSINESSES
… Sales 2019, €b
Explore potential disposal
of MMA/ PMMA
Focus on specialty segment
(~€0.2b) high-value
intermediates for fluoropolymers,
as well as fluoroderivatives for
electronics & batteries
Investigate strategic alternatives
for emissive applications (air
conditioning and refrigeration),
including partnerships (~€0.5b)
Balance acrylic monomer
capacity in Asia through
upstream partnerships and
downstream growth (organic
or bolt-on acquisitions)
0.61 0.7 0.3
Once these
strategies are
executed these
segments will be
integrated in
Specialty Materials
1. Excludes €0.2b from Functional Polyolefins business – closing of disposal expected in Q2 2020
MMA/ PMMA FLUOROGASES ASIA ACRYLICS
Strategic review in progress to assess the best path for each component – pending appropriate market conditions
ROADSHOW - SEPTEMBER 2020
21
CASH ALLOCATION PRIORITIES
Reiterating our progressive dividend policy, targeting 40% payout ratio by 2024
Opportunistic share buy-back program
Estimated cash to allocate over the 5 year plan
~€3.5b at constant leverage 3 (~1.6x)
Cash to allocate1
2015-2019
Cash to allocate2
2020-2024
+25%
Cash
allocation
2020-2024
Mostly small and medium size bolt-on acquisitions
Across our 3 platforms with priority in adhesives
EV/EBITDA multiple after growth and synergies of <7x EBITDA
Proceeds from strategic review of intermediates
Exceptional capex: IRR ≥ 15% after taxes
Includes capacity expansion PA11 in Asia (€450m total investment, and €100m EBITDA contribution at maturity) and Nutrien partnership (US$150m investment)
Return to
shareholders
40-45%
40-45%
Net M&A
Exceptional
growth capex
15%
SUBJECT TO MARKET CONDITIONS
1. Cash from operations minus recurring CAPEX 2. Cash from operations minus recurring CAPEX plus additional net debt available at constant leverage 3. 1.6x net debt to EBITDA ratio incl. €700m hybrid bonds
Employee shareholder program
ROADSHOW - SEPTEMBER 2020
22
MAINTAIN STRICT FINANCIAL DISCIPLINE
ROCE
>10%
Net debt to EBITDA ratio
<2xIncl. hybrid bonds
Solid investment grade rating
Recurring Capex
~5.5%of sales
Controlled working capital
~14%of sales
ROADSHOW - SEPTEMBER 2020
23
STRONG COMMITMENT ON CLIMATE AND ENVIRONMENT
≤ 2,950kt eq. CO2
(-38% vs 2015)
Commitment to Paris agreement
and Science-Based Target
trajectory well below 2°C
Greenhouse gas emissions
(GHG) new target for 2030
Performance 2019 (vs 2012)
-40%
AIR
-50% -9%
WATER ENERGY
-65%vs 2012
-60%vs 2012
-20%vs 2012
New targets for 2030
in volatile organic compounds (VOC) emissions intensity
in chemical oxygen demand (COD)
intensity
in net energy purchases intensity
CLIMATE PLAN ENVIRONMENTCLIMATE
6,480
4,7204,087
2012 est. 2015 2019
GHG EMISSIONS in kt eq. CO2
ROADSHOW - SEPTEMBER 2020
INNOVATION TO SUPPORT SUSTAINABLE DEVELOPMENT
24 ROADSHOW - SEPTEMBER 2020
PORTFOLIO SUSTAINABILITY ASSESSMENT
In 2019, 149 patent applications linked
to sustainable development,
representing 67% of the total number
of patent applications.
Industry leading range of bio-
based specialty polyamides
Large range of VOC-free
coating solutions
Lightweight composites
to reduce GHG emissions
Circular economy initiatives
(e.g. recyclable resins)
44% of products portfolio assessed at
end 2019, 46% of which is significantly
contributing to UN Sustainable
Development Goals
Objective to achieve 100% portfolio
sustainability assessment
RESEARCH & INNOVATION
CULTIVATE AN OPEN DIALOGUE WITH OUR STAKEHOLDERS
25 ROADSHOW - SEPTEMBER 2020
PHILANTHROPY
Funds for
education,
salary rounding,
sponsoring
DIVERSITY
Promotion of women
and international
talents in senior
management
EMPLOYEES
80% are actively
engaged
COMMON
GROUND®
Nearly 1000 initiatives taken
From 23% to 25%
in 2025
women in senior
management
Q2 AND H1 2020 RESULTS
Q2'19 Q2'20Q2'19 Q2'20
ROBUST Q2’20 PERFORMANCE IN THE CONTEXT OF COVID-19
27
EBITDA ADJ. NET INCOME
In €m In €m
15.0%MARGIN
407
286192
90
€1.18ADJ. EPS
ROADSHOW - SEPTEMBER 2020
Q2'19 Q2'20
FREE CASH FLOW
90
288
x3.2
In €m
Q2'19 Q2'20
SALES
In €m
-15.6%
2,254
1,902
OVERALL ROBUST Q2’20 PERFORMANCE IN THE EXCEPTIONAL COVID-19 CONTEXT
28 ROADSHOW - SEPTEMBER 2020
€1,902m sales
Global economy strongly impacted by Covid-19 pandemic
Down 15.6% YoY (-10.7% in H1’20)
Significant slowdown in the construction, transportation and industrial sectors
Good demand in the nutrition, packaging and hygiene markets
Sequential improvement in June, supported by the progress in the construction market
€286m EBITDA
15.0% EBITDA margin
Resilient performance in view of the context
Solid performance of Advanced Materials (20% EBITDA margin)
Sharp rebound for Bostik in June
Benefits of rapidly implemented interim fixed cost reduction initiatives
€90m adj. net income €1.18 adjusted EPS
€288m free cash flowExcellent FCF for a second quarter (€90m in Q2’19)
Strict management of working capital and capital expenditure
€2,134m net debt(incl. €1bn hybrid bonds)
Sharp decrease compared to 31 March 2020 (€2,481m)
€168m dividend payment
€246m net proceeds from Functional Polyolefins’ divestment
Q2’20 KEY FIGURES
29
In €m Q2’19 Q2’20 Change
Sales 2,254 1,902 (15.6)%
EBITDA
Specialty Materials 1
Intermediates
Corporate
407
304
127
-24
286
233
66
-13
(29.7)%
(23.4)%
(48.0)%
EBITDA margin 18.1% 15.0%
Recurring operating income (REBIT) 278 144 (48.2)%
REBIT margin 12.3% 7.6%
Adjusted net income 192 90 (53.1)%
Net debt (incl hybrid bonds)
€2,331m as of 31/12/20192,008 2,134
ROADSHOW - SEPTEMBER 2020
1. Specialty Materials include the three following segments: Adhesive Solutions, Advanced Materials and Coating Solutions
Q2’20 SALES BRIDGE
30
Q2’19 Q2’20
+2.9%(5.9)%(12.2)%
2,254
1,902
CurrencyVolumes Prices Scope
(0.4)%
Effect of lockdowns
Slowdown in construction, transportation and industrial sectors
Good demand in packaging, nutrition and hygiene
Improvement of the construction market in June in Europe/US
Integration of
ArrMaz, LambsonProchimir and LIP
Divestment of Functional Polyolefins on 1 June 2020
In €m
ROADSHOW - SEPTEMBER 2020
Devaluation of
emerging currencies impacting mainly Adhesive Solutions
Resilient prices in
Adhesive Solutions and Advanced Materials
More challengingmarket conditions for Intermediates in a context of lowerdemand
ADHESIVE SOLUTIONS (24% OF GROUP SALES)
31
In €m Q2’19 Q2’20 Change
Sales 520 453 (12.9)%
EBITDA 71 50 (29.6)%
EBITDA margin 13.7% 11.0%
Rec. operating income 55 35 (36.4)%
Volumes (13.2)%
Prices (0.9)%
Currency (1.5)%
Scope +2.7%
€453m sales, down 12.9% YoY
● Despite packaging and hygiene markets holding firm, volumes down 13.2%, impacted by the sharp slowdown in the construction, transportation and industrial sectors
● Price -0.9% held up well, reflecting the optimization of the product mix in 2019
● +2.7% scope effect, on LIP and Prochimir integration
€50m EBITDA
● EBITDA down 29.6% YoY on sharp volume contraction in construction in April and May, and weak demand in industrial assembly sector
● Performance picked up sharply in June thanks to the rebound seen in the construction and DIY markets, industrial markets remaining mixed
● Benefits from the operational excellence and fixed cost savings initiatives, as well as favorable impact of certain raw materials
● EBITDA margin at 11.0%, temporarily down versus last year
237216
ROADSHOW - SEPTEMBER 2020
Q2’20 KEY FIGURES
Q2’20 HIGHLIGHTS
Q2’20 SALES DEVELOPMENT Q2’20 SALES BY BUSINESS LINE
Construction & Consumer
Industrial Assembly
€628m sales, slightly down 3.4% YoY
● Volumes down 11.5%, with Covid-19 weighing strongly on demand for High Performance Polymers
o significant decline in the transportation, consumer electronics, oil & gas and sports sectorso good performance of the nutrition market and certain niche applications used in the fight against the virus
● Limited price effect of -2.0%
● 10.1% positive scope effect relating to ArrMaz consolidation, driven by favorable end-markets such as crop nutrition
Resilient performance with €124m EBITDA and 19.7% EBITDA margin
● EBITDA down 12.7% YoY, reflecting sharp drop in volumes, notably for High Performance Polymers, partly offset by the good resistance of Performance Additives
● EBITDA margin at a high level, benefitting from a good product mix, the favorable evolution of certain raw materials and fixed costs reduction
ADVANCED MATERIALS (33% OF GROUP SALES)
32
Q2’20 KEY FIGURES
In €m Q2’19 Q2’20 Change
Sales 650 628 (3.4)%
EBITDA 142 124 (12.7)%
EBITDA margin 21.8% 19.7%
Rec. operating income 87 61 (29.9)%
Volumes (11.5)%
Prices (2.0)%
Currency 0.0%
Scope +10.1%
Q2’20 HIGHLIGHTS
Q2’20 SALES DEVELOPMENT Q2’20 SALES BY BUSINESS LINE
ROADSHOW - SEPTEMBER 2020
High Performance Polymers
Performance Additives
178
450
COATING SOLUTIONS (23% OF GROUP SALES)
33
In €m Q2’19 Q2’20 Change
Sales 575 436 (24.2)%
EBITDA 91 59 (35.2)%
EBITDA margin 15.8% 13.5%
Rec. operating income 62 28 (54.8)%
Volumes (15.8)%
Prices (9.5)%
Currency (0.1)%
Scope +1.2%
ROADSHOW - SEPTEMBER 2020
Q2’20 KEY FIGURES
Q2’20 HIGHLIGHTS
Q2’20 SALES DEVELOPMENT Q2’20 SALES BY BUSINESS LINE
Coating Resins
Coating Additives314
122
€436m sales, down 24.2% YoY
● Volumes down 15.8%, due to weak demand in construction, paints and in some industrial markets
● -9.5% price effect, stemming mainly from lower propylene prices
● Scope effect +1.2% reflecting the integration of Lambson
€59m EBITDA and 13.5% EBITDA margin
● EBITDA down 35.2% YoY compared to Q2’19 excellent performance (€91m)
● Benefit from the improvement of the decorative paints market in June
● EBITDA margin held up well, thanks in particular to the benefits of the integration between upstream and downstream activities
INTERMEDIATES (20% OF GROUP SALES)
34
In €m Q2’19 Q2’20 Change
Sales 502 379 (24.5)%
EBITDA 127 66 (48.0)%
EBITDA margin 25.3% 17.4%
Rec. operating income 99 35 (64.6)%
Volumes (8.1)%
Prices (12.3)%
Currency +0.1%
Scope (4.2)%
ROADSHOW - SEPTEMBER 2020
Q2’20 KEY FIGURES
Q2’20 HIGHLIGHTS
Q2’20 SALES DEVELOPMENT
€379m sales, down 24.5% YoY
● -12.3% price effect mainly reflecting challenging market conditions in Fluorogases and lower propylene prices
● Volumes down 8.1%
o slowdown in the construction and automotive sectorso strong demand in the niche market for PMMA protective sheets, as in the first quarter
● Scope effect -4.2% corresponding to the Functional Polyolefins divestment finalized on 1 June 2020
€66m EBITDA and 17.4% EBITDA margin
● EBITDA down -48.0% YoY in a context of strong declines in volumes and prices
● Performance of Fluorogases impacted by illegal HFC imports into Europe, easing towards the end of the period
PORTFOLIO MANAGEMENT HIGHLIGHTS SINCE 1 JANUARY 2020
35 ROADSHOW - SEPTEMBER 2020
LIP
Leading global manufacturer of high-performance thermobonding adhesive powders
Excellent complementarity in terms of product offering and geographic exposure
Revenue of ~€55m per year, with two production sites in Europe and one in China
Markets: construction, technical coatings, batteries, automotive, and textile printing
Closing expected in Q4’20*
FIXATTI
Danish leader in tile adhesives, water proofing systems and floor preparation solutions
Extended range of high value-added solutions, while boosting presence in Nordic countries
Revenue of ~€30m per year
Finalized on 3 January 2020
*Subject to approval by the antitrust authorities in the relevant countries
Sale of Arkema’s Functional Polyolefins business, part of PMMA activity, to SK Global Chemical
Revenue of ~€250m per year in food packaging, cable, electronics and coating markets
Enterprise value of €335 million (net proceeds of €246 million)
Finalized on 1 June 2020
FUNCTIONAL POLYOLEFINS
Bolt-on acquisitions in Adhesive Solutions Divestment finalization
MAIN ORGANIC CAPEX SINCE 1 JANUARY 2020
36
NUTRIEN
Long term stable and competitive AHF supply for Calvert City site (US)
~50% for high added value fluoropolymers and fluoro-derivatives, ~50% for low-GWP fluorogases
Greater environmental protection than more traditional production processes
US$150 million investment in a 40 kt/year AHF production plant at Nutrien’s site in North Carolina (start-up expected first half 2022)
ROADSHOW - SEPTEMBER 2020
KERTEH 2
Doubling of the methyl mercaptan production capacity at Kerteh site in Malaysia
Supporting the strong growth of the animal feed, petrochemical and refining markets in Asia
Strengthening the Group’s world leading position in high value added sulfur derivative
Start-up in Q1 2020
Innovative partnership for the supply of anhydrous hydrogen fluoride (AHF)
Attractive growth capex in Advanced Materials
H1'19 H1'20H1'19 H1'20 H1'19 H1'20
H1’20 PERFORMANCE
37
SALES EBITDA ADJ. NET INCOME
In €m In €m In €m
-10.7%
4,4693,990
777
586
14.7%MARGIN
357
190
€2.49ADJ. EPS
ROADSHOW - SEPTEMBER 2020
31/12/2019 30/06/2020
NET DEBT (incl. hybrid bonds)
2,3312,134
1.7xLTM EBITDA
In €m
H1’20 KEY FIGURES
38
In €m H1’19 H1’20 Change
Sales 4,469 3,990 (10.7)%
EBITDA
Specialty Materials 1
Intermediates
Corporate
777
596
230
-49
586
489
134
-37
(24.6)%
(18.0)%
(41.7)%
EBITDA margin 17.4% 14.7%
Recurring operating income (REBIT) 525 304 (42.1)%
REBIT margin 11.7% 7.6%
Adjusted net income 357 190 (46.8)%
ROADSHOW - SEPTEMBER 2020
1. Specialty Materials include the three following segments: Adhesive Solutions, Advanced Materials and Coating Solutions
RECONCILIATION OF EBITDA TO NET CASH FLOW
H1’20 CASH FLOW
Tax rate H1’20: ~22% of REBIT (excl. exceptional items)
Strict working capital management
● 16.5% working capital on annualized
sales (16.0% end of June 2019)
Non-recurring items include tax savings
linked to the use of tax losses for an
amount of €55m in Q2’20
Portfolio management mainly
corresponding to LIP acquisition and
Functional Polyolefins divestment
H1’20 HIGHLIGHTS
In €m H1’19 H1’20
EBITDA 777 586
Current taxes (96)1 (55)
Cost of debt (49) (42)
Change in working capital and fixed assets payables 2 (229) (78)
Recurring capital expenditure (187) (157)
Exceptional capital expenditure (38) (57)
Non-recurring items and others (15)1 53
FREE CASH FLOW 163 250
Impact of portfolio management (25) 147
NET CASH FLOW 138 397
1. Restated for tax impact on non-recurring items
2. Excluding non-recurring items and impact of portfolio management
39 ROADSHOW - SEPTEMBER 2020
H1’20 NET DEBT BRIDGE (INCLUDING HYBRID BONDS)
SECOND QUARTER 2020 RESULTS40
In €m
31/12/2019 30/06/2020Free cash flow
M&A FX and others
1,631
11
1,134
168
(250)
1.7x LTM EBITDA
700hybrid bonds
1,000hybrid bonds
2,331
2,134(147)
Dividends Share buybacks
21
2020 OUTLOOK
ROADSHOW - SEPTEMBER 202041
Based on the progressive lifting of lockdown measures in some important countries for the Group, Arkema
expects that demand will continue to improve gradually in the second part of the year, while remaining below last year’s level
The pace and strength of this improvement are still uncertain, dependent on the evolution of the pandemic,
and will vary between end-markets and geographies
Arkema estimates at this stage that sales in the third quarter will decline by around 10% year-on-year at constant scope and currency, representing a clear improvement compared to the decline of around 20%
recorded in the second quarter
The Group confirms it is on track to reduce in 2020 its fixed costs by €50 million compared to 2019 and to
reduce capital expenditure by €100 million compared to the level originally planned
Arkema will continue its acquisition strategy, the roll-out of its major organic growth projects, as well as its
strategic review for Intermediates, in line with its ambition to become a pure Specialty Materials player by 2024
The information disclosed in this document may contain forward-looking statements with respect to the financial condition, results of operations, business
and strategy of Arkema.
In the current context, where the Covid-19 epidemic continues to rapidly spread across the world, and the evolution of the situation as well as the
magnitude of its impacts on the global economy are highly uncertain, the retained assumptions and forward looking statements could ultimately prove
inaccurate.
Such statements are based on management’s current views and assumptions that could ultimately prove inaccurate and are subject to material risk
factors such as among others, changes in raw material prices, currency fluctuations, implementation pace of cost-reduction projects, developments in
the Covid-19 situation, and changes in general economic and business conditions. These risk factors are further developed in the 2019 Universal
Registration Document.
Arkema does not assume any liability to update such forward-looking statements whether as a result of any new information or any unexpected event
or otherwise.
Further information on factors which could affect Arkema’s financial results is provided in the documents filed with the French Autorité des marchés
financiers.
Financial information since 2005 is extracted from the consolidated financial statements of Arkema. Quarterly financial information is not audited.
The business segment information is presented in accordance with Arkema’s internal reporting system used by the management.
The main performance indicators used by the Group are defined in the 2019 Universal Registration Document. As part of the analysis of its results or to
define its objectives, the Group uses in particular the following indicators:
EBITDA margin: corresponds to EBITDA as a percentage of sales, EBITDA equaling recurring operating income (REBIT) plus recurring depreciation and
amortization of tangible and intangible assets
REBIT margin: corresponds to the recurring operating income (REBIT) as a percentage of sales
Free cash flow: corresponds to cash flow from operations and investments excluding the impact of portfolio management
EBITDA to cash conversion rate: corresponds to the free cash flow excluding exceptional capital expenditure divided by EBITDA
Return on average capital employed (ROACE): corresponds to the REBIT divided by the average of capital employed at the end of years Y and Y-1.
DISCLAIMER
42 ROADSHOW - SEPTEMBER 2020
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